A household inventory is a list of important items from residential real estate property. Due to COVID-19, the inventory rate has seen a sharp decline for these reasons.
Low-interest rate
Last year’s mortgage interest was on average 2.54% for 30-year fixed mortgages, which is the lowest than 2019’s average of 4,51%. Many homeowners who already have homes took that as an investment opportunity. They dipped in the interest rate and refinanced their home with a plan to stay put up the existing home. In addition, many homeowners chose to shift to the smaller urban community, which resulted in an influx. Both are contributing to the low interest rate.
Fewer new construction homes
The lack of new homes being constructed is another major factor contributing to the low inventory issue. Every year the demand for real estate property is increasing. Newly constructed homes play a vital role in this issue. During the pandemic situation, builders struggled with unstable building supply costs which resulted in fewer buildings being constructed. The gap in the consistency in building supplies and skilled workers contributed to the low inventory.
Investors purchasing inventory
Before the pandemic hit the real estate business, the general buyers who wanted to purchase a living house were the lion’s share of the total residential real estate property clients. But after COVID-19, the mortgage interest went down by a significant amount. Investors have also been taking advantage of the lower-than-average interest rates and have been buying up available inventory. Moreover, it has increased the competition among traditional home buyers as there is a small number of houses in the market.